Stark Law Seen as Early Regulation Target

Rich Daly, HFMA Senior Writer/Editor

Anti-kickback changes especially are needed to allow better functioning of ACOs, according to providers.

Jan. 30—Reducing regulatory burdens is a common recommendation from healthcare providers and their advocates to the Trump administration and the new Congress. And one of the biggest regulatory headaches remains the Stark Law, which targets actions
seen as anticompetitive.

The appeal to reduce regulations is expected to fall on willing ears, given that many Republicans have urged the repeal and replacement of the Affordable Care Act (ACA) in part to reduce what they perceive as the overregulation of health care.

Thirty-nine hospitals and health systems joined other healthcare entities to highlight regulatory barriers and lay out principles the Trump administration should adhere to in seeking to bolster the shift to value-based payment.

“Over the years, the regulations governing this system have grown extraordinarily complex,” the organizations wrote in a Jan. 25
letter. “This complexity hampers efforts of clinicians and other healthcare providers who have been diligently working to measurably improve quality, reduce costs and take accountability for populations of patients.”

Similarly, the American Hospital Association (AHA) and about 70 other hospital groups wrote Congress a
letter on Jan. 27 that outlined priorities in any ACA replacement, noting that “significant regulatory reform to address the burden faced by hospitals and health systems needs to be implemented by both the legislative and executive branches.”

Where to Begin

The range of potential regulatory targets in health care is significant and has been greatly increased by implementation of the 2,000-page ACA. In just the first 10 months of 2016, the U.S. Department of Health and Human Services (HHS) and its agencies issued 43 proposed and final rules with 21,000 pages of
text affecting hospitals and health systems, according to AHA.

“In addition to the sheer volume, the scope of changes required by the new regulations is beginning to outstrip the field’s ability to absorb them,” Rick Pollack, president and CEO of AHA, wrote in a Dec. 2
letter to Trump.

It remains unclear what the effects will be of early Trump initiatives to roll back regulations, such as a first-day executive order instructing federal agencies to relieve ACA “burdens” and a Jan. 30 order for all federal agencies to reverse two rules for every new one
issued. But hospitals have many regulatory targets in mind.

Pollack called the order a “good first step” and said the association will work with the administration on reducing regulations.

“We are encouraged by the executive order signed by President Trump today that will help reduce red tape,” he said in a written
statement.

Among 33 areas of regulation where hospitals urged Trump to provide relief was enforcement of the Anti-Kickback Statute and the Stark Law, which is a conflict-of-interest statute that restricts physicians from making referrals based on financial considerations. The laws were impeding hospitals from
coordinating care and participating in new payment models, according to AHA.

“A new exception should be created that protects any arrangement that meets the terms of the newly created anti-kickback safe harbor for clinical integration arrangements,” Pollack wrote.

That call increasingly is being echoed on Capitol Hill.

Nick Turkal, MD, president and CEO of Aurora Health Care, noted at a Jan. 25 congressional briefing that the Stark Law was created to guard against conflicts in fee-for-service (FFS) payment arrangements.

“As we move away from that, let’s fix the things that don’t work,” Turkal said. “And to put handcuffs on us won’t allow us to do the things we need to do to be a good partner. We don’t want bad actors in healthcare, either. But we do want solutions where we can work across lines much more
effectively.”

Specific Changes On
Tap

The Stark Law may be moving closer to an overhaul than at any point since its earliest provisions were enacted in 1990. The provider calls for changes followed a July 2016 Senate Finance Committee
report that suggested a range of updates to modernize the law to better fit a changing healthcare landscape. Seeking to encourage innovative payment models, the report examined potential changes such as expanded waivers, reduced penalties for technical violations, and simplified definitions and exceptions.

Among Stark changes sought by Premier are new protections for accountable care organizations (ACOs). The waivers offered to providers under the Medicare Shared Savings Program do not extend to downstream providers or suppliers, a Premier
analysis noted. ACOs thus are barred from arrangements with pharmaceutical companies that allow for rebates on drugs or devices when the long-term outcome does not meet certain expectations, which is referred to as value-based contracting.

The law also prevents ACOs from paying skilled nursing facilities more than the Medicare rate to cover the costs of treating medically complex patients. Such a restriction hampers the ability of ACOs to ensure such patients are accepted and receive needed care.

Other specific changes sought by Premier included:

Permitting ACO participants to provide detailed information on provider quality, such as star ratings, to aligned or potentially aligned beneficiaries

Permanently codifying existing exceptions to the Anti-Kickback Statute and the Stark Law for donation and financial support of electronic health record software, technology, and training

Allowing beneficiary engagement tools such as copay waivers, transportation fees, and information about the value of post-acute care settings within alternative payment models

Among the hospital advisory group’s suggested legislative changes: requiring HHS to review and assess the Anti-Kickback Statute and the Stark Law in the context of transforming the healthcare system and protecting against fraud and abuse amid new payment models aimed at improving care and lowering
costs.

Michael Leavitt, a former HHS secretary, noted at the Jan. 25 congressional briefing that Stark rules have prevented anticompetitive relationships and incentives for unacceptable behavior.

“On the other hand, people have to work together in a collaborative way to make this happen,” Leavitt said, referring to healthcare transformation. “There’s a give-and-take that goes into that.”

The possibility of changes to Stark comes amid an aggressive antifraud enforcement push. The Justice Department (DOJ) obtained more than $4.7 billion in settlements and judgements from civil cases involving allegations of fraud and false claims in FY16, which was the third-highest
annual recovery in False Claims Act (FCA) history, according to an
announcement. The DOJ has used the FCA to enforce the Stark Law and target arrangements that compromise physician independence, according to legal observers.

Anti-kickback changes especially are needed to allow better functioning of ACOs, according to providers.

Jan. 30—Reducing regulatory burdens is a common recommendation from healthcare providers and their advocates to the Trump administration and the new Congress. And one of the biggest regulatory headaches remains the Stark Law, which targets actions
seen as anticompetitive.

The appeal to reduce regulations is expected to fall on willing ears, given that many Republicans have urged the repeal and replacement of the Affordable Care Act (ACA) in part to reduce what they perceive as the overregulation of health care.

Thirty-nine hospitals and health systems joined other healthcare entities to highlight regulatory barriers and lay out principles the Trump administration should adhere to in seeking to bolster the shift to value-based payment.

“Over the years, the regulations governing this system have grown extraordinarily complex,” the organizations wrote in a Jan. 25
letter. “This complexity hampers efforts of clinicians and other healthcare providers who have been diligently working to measurably improve quality, reduce costs and take accountability for populations of patients.”

Similarly, the American Hospital Association (AHA) and about 70 other hospital groups wrote Congress a
letter on Jan. 27 that outlined priorities in any ACA replacement, noting that “significant regulatory reform to address the burden faced by hospitals and health systems needs to be implemented by both the legislative and executive branches.”

Where to Begin

The range of potential regulatory targets in health care is significant and has been greatly increased by implementation of the 2,000-page ACA. In just the first 10 months of 2016, the U.S. Department of Health and Human Services (HHS) and its agencies issued 43 proposed and final rules with 21,000 pages of
text affecting hospitals and health systems, according to AHA.

“In addition to the sheer volume, the scope of changes required by the new regulations is beginning to outstrip the field’s ability to absorb them,” Rick Pollack, president and CEO of AHA, wrote in a Dec. 2
letter to Trump.

It remains unclear what the effects will be of early Trump initiatives to roll back regulations, such as a first-day executive order instructing federal agencies to relieve ACA “burdens” and a Jan. 30 order for all federal agencies to reverse two rules for every new one
issued. But hospitals have many regulatory targets in mind.

Pollack called the order a “good first step” and said the association will work with the administration on reducing regulations.

“We are encouraged by the executive order signed by President Trump today that will help reduce red tape,” he said in a written
statement.

Among 33 areas of regulation where hospitals urged Trump to provide relief was enforcement of the Anti-Kickback Statute and the Stark Law, which is a conflict-of-interest statute that restricts physicians from making referrals based on financial considerations. The laws were impeding hospitals from
coordinating care and participating in new payment models, according to AHA.

“A new exception should be created that protects any arrangement that meets the terms of the newly created anti-kickback safe harbor for clinical integration arrangements,” Pollack wrote.

That call increasingly is being echoed on Capitol Hill.

Nick Turkal, MD, president and CEO of Aurora Health Care, noted at a Jan. 25 congressional briefing that the Stark Law was created to guard against conflicts in fee-for-service (FFS) payment arrangements.

“As we move away from that, let’s fix the things that don’t work,” Turkal said. “And to put handcuffs on us won’t allow us to do the things we need to do to be a good partner. We don’t want bad actors in healthcare, either. But we do want solutions where we can work across lines much more
effectively.”

Specific Changes On
Tap

The Stark Law may be moving closer to an overhaul than at any point since its earliest provisions were enacted in 1990. The provider calls for changes followed a July 2016 Senate Finance Committee
report that suggested a range of updates to modernize the law to better fit a changing healthcare landscape. Seeking to encourage innovative payment models, the report examined potential changes such as expanded waivers, reduced penalties for technical violations, and simplified definitions and exceptions.

Among Stark changes sought by Premier are new protections for accountable care organizations (ACOs). The waivers offered to providers under the Medicare Shared Savings Program do not extend to downstream providers or suppliers, a Premier
analysis noted. ACOs thus are barred from arrangements with pharmaceutical companies that allow for rebates on drugs or devices when the long-term outcome does not meet certain expectations, which is referred to as value-based contracting.

The law also prevents ACOs from paying skilled nursing facilities more than the Medicare rate to cover the costs of treating medically complex patients. Such a restriction hampers the ability of ACOs to ensure such patients are accepted and receive needed care.

Other specific changes sought by Premier included:

Permitting ACO participants to provide detailed information on provider quality, such as star ratings, to aligned or potentially aligned beneficiaries

Permanently codifying existing exceptions to the Anti-Kickback Statute and the Stark Law for donation and financial support of electronic health record software, technology, and training

Allowing beneficiary engagement tools such as copay waivers, transportation fees, and information about the value of post-acute care settings within alternative payment models

Among the hospital advisory group’s suggested legislative changes: requiring HHS to review and assess the Anti-Kickback Statute and the Stark Law in the context of transforming the healthcare system and protecting against fraud and abuse amid new payment models aimed at improving care and lowering
costs.

Michael Leavitt, a former HHS secretary, noted at the Jan. 25 congressional briefing that Stark rules have prevented anticompetitive relationships and incentives for unacceptable behavior.

“On the other hand, people have to work together in a collaborative way to make this happen,” Leavitt said, referring to healthcare transformation. “There’s a give-and-take that goes into that.”

The possibility of changes to Stark comes amid an aggressive antifraud enforcement push. The Justice Department (DOJ) obtained more than $4.7 billion in settlements and judgements from civil cases involving allegations of fraud and false claims in FY16, which was the third-highest
annual recovery in False Claims Act (FCA) history, according to an
announcement. The DOJ has used the FCA to enforce the Stark Law and target arrangements that compromise physician independence, according to legal observers.

HFMA RESOURCE LIBRARY

Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.

No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.

This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.

This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.

Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.

Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.

To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.

Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.

Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.

Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.

Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.

The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.

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Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.

Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.

Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.

The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.

The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.

Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.

Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.

Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.

Read more about factors contributing to the changes in the post-acute marketplace and what it means for manufacturers, physicians, clinicians, patients, and post-acute facilities as they anticipate the transition to the second curve.

HSG helped the physicians and executives of St. Claire Regional in Morehead, Kentucky, define their shared vision for how the group would evolve over the next decade. As well as, develop the strategic and operational priorities which refocused and accelerated the group’s evolution.

The client was a nine-hospital health system with 14 clinics serving communities in a multi-state market with very limited access to care, poor economic conditions, high unemployment, and a heavy Medicare/Medicaid/uninsured payer mix. In most of these communities, the system was the sole source of care.
Though the clinics were of substantial size (they employed 98 physicians) and comprised of multiple specialists, the physicians functioned as individuals and the practices lacked any real group culture.

Clinical integration can be expensive, but it doesn’t have to be, as this four-step road map for developing a CIN proves. Does it have to cost millions to initiate a clinical integration strategy?
Contrary to popular belief, we have clients who have generated substantial shared savings and a significant ROI over time, without massive investments. Yes, some financial capital is required for resources the CIN providers can’t bring to the table themselves. But the size of that investment can be miniscule relative to the value it produces: improved outcomes and documentation for payers.

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Revenue Cycle Management has become an even more complex issue with declining reimbursements, implementation of Electronic Health Records, evolving local carrier determinations (LCD), and payer credentialing [The emphasis on healthcare fraud, abuse and compliance has increased the importance of accuracy of data reporting and claims filing).
The efficiency of a medical practice’s billing operations has critical impact on the financial performance. In many cases, patient billings are the primary revenue source that pays staff salaries, provider compensation and overhead operating cost. Inefficiencies or inaccurate billing will contribute to operating losses.

This publication identifies and outlines the necessary characteristics of a fully-functioning clinically integrated network (CIN). What it doesn’t do is detail how hospitals and providers can participate in the value-based care environment during the development process.
One common misconception is that the CIN can’t do anything significant until it has obtained the FTC’s “clinically integrated” stamp of approval. While the network must satisfy the FTC’s definition of clinical integration before single signature contracting for FFS rates and contracts can legally start, hospitals and providers can enjoy three key benefits during the development process.

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With the proper process, tools, and feedback mechanisms in place, budgeting can be a valuable exercise for organizations while helping hold organizational leaders accountable. Having a proper monthly variance review process is one of the most critical factors in creating a more efficient and accurate budget. Monthly variance reporting puts parameters around what is to be expected during the upcoming budget entry process.

Managing the cost of patient care is the top strategic priority of most hospital CFOs today. As healthcare shifts to more data-driven decision making, having clear visibility into key volume, cost and profitability measures across clinical service lines is becoming increasingly important for both long-range and tactical planning activities. In turn, the cost accounting function in healthcare provider organizations is becoming an increasingly important and strategic function. This whitepaper includes five strategies for efficient and accurate cost accounting and service line analytics and keys to overcoming the associated challenges.